Summary of the period 1 July to 30 September 2024
- Net sales TSEK 74,402 (43,380)
- Cash flow from current operations TSEK -4,970 (5,762)
- Profit after financial items TSEK 17,020 (13,380)
- Profit after tax TSEK 12,300 (12,307)
- Earnings per share, before dilution SEK 0,44 (0,47)
The entire quarterly report is available at: https://intellego-technologies.com/sv/rapporter/
A Message from the CEO
Intellego's journey of growth continued during Q3 and we are on track to achieve our goal of reaching over 300 million SEK in revenue with EBIT of over 110 million SEK in 2024. Cashflow for the full year continues to improve and the company currently has approximately 50 million SEK in short term liquid assets where most of it is cash in the bank, which is expected to grow until the end of the year. These funds will be sufficient for Intellego to fully finance its foreseeable future growth. In addition, several projects are now being launched which will provide significant revenue increase in 2025 why Intellego hereby update its long-term financial goals to 2 billion SEK in revenue and 600 million SEK in EBIT in the next 3 to 5 years, a 100% increase from Intellego's last long term financial goals.
Revenue in Q3 was in line with expectations but EBIT was lower than we hoped due to 5 million SEK in increased external costs, the fine from Nasdaq of 2,2 million SEK and depreciation on capital equipment of almost 5 million SEK. Gross margin for the group was also lower due to sales of capital equipment. The EBIT level and gross margin are expected to increase from these Q3 levels based on, e.g. dosimeter sales will follow equipment sales plus we have several major dosimeter projects that are being started towards the end of the year. Operational cash flow was also lower than expected which was caused by late payments from two customers amounting to a value of approximately 20 million SEK. The company have now received full payment from one of these customers and the other one have expressed that the payment shall arrive to Intellego before the end of this year. Furthermore, from the 187 million SEK in revenue from 2023, approximately 90% of those have been paid to today's date which shows that receivables are turned into cash, but it also shows that the company has more work to do on shortening the payment times, especially with our largest customers. This work is ongoing and takes time but it is moving in the right direction. As the existing receivables are mainly with larger customers its possible for Intellego credit secure its receivables through Intellego's new financing structure, that eliminates the risk in the receivables, which will be mentioned more in detail below. As Intellego now also approximately 50 million SEK in short term liquid assets and growing, Intellego is in a good position to finance its future growth without having to raise external capital.
During Q3, the group continued to invest in its future growth which can be seen by the increase in other external costs. These investments will be a key part in achieving Intellego's long term goal, 2 billion SEK in revenue and 600 million SEK in EBIT, in the next 3-5 years. The investments made earlier in the year are now starting to be monetized. Intellego does not plan to make as large investments for the foreseeable future but rather switch focus to transforming these investments into cash.
The sales of capital equipment through Yuvio is progressing well where its first sales were made during Q3. It is expected that Yuvio shall have placed several hundred devices into the market in the next coming years, which the results from Q3 confirm. Yuvio has a flexible payment structure where the company can lease or sell the devices to the market. Some end customers prefer to lease while others prefer to buy the equipment.
Daro delivered its strongest quarter of the year and a record quarter for the Group. This record quarter was driven by all business divisions and benefitted from investments for growth made in 2023. Further strong growth is expected from Daro going forward, led by its specialist divisions, Lighting and UV & Water, and the recent acquisition of UV Light Technology.
During Q3, Intellego started a new collaboration with EKN (Export Kredit Nämnden) and the Nordea bank which will significantly change Intellego's financial structure and possibilities. Not only will Intellego interest costs drop by more than half but these collaborations will also enable Intellego to credit secure its receivables on the global market, something which previously was only possible with Swedish customers. This gives comfort as Intellego can turn its long-term receivables into cash on short notice and thus the company will still be able to offer longer payment times if necessary.
In the last months the company has communicated updates regarding different projects which are expected to be launched or expanded in 2025:
- The global market launch of Intellego's curing dosimeters and app system which we previously communicated, has started and Intellego is now a registered supplier that make continuous deliveries to its partner. We have been working on this project for two years and we look forward to scale this collaboration further. The project and the UV curing market is expected to create significant revenue from 2025 and onward for Intellego with an annual revenue of at least 15 million Euros per year. It will take several years to achieve this revenue on an annual basis as the sales increase will be gradual. UV curing significant production process exist on a global basis and e.g. cell phones, computers, food packaging and other every day goods are being produced with UV curing as a part of the production process. The global UV curing market is estimated to be worth over 10 billion USD per year.
- Another collaboration we have is with Likang which is one of the largest disinfection companies in China with sales in approximately 3,000 hospitals. Likang is part of the Yuwell group which has sales in to 300,000 healthcare facilities, globally. Shortly before the publication of this Q3 report Intellego announced that the collaboration between Likang and Intellego will be expanded to also cover additional products in the disinfection market. This extended collaboration will generate a significant revenue increase for Intellego in China, assuming relevant market approvals can be achieved. As Intellego and Likang both have experience from the regulatory process and has been in contact with regulatory authorities already, the parties are positive that a market approval will be achieved. This collaboration can potentially also be scaled to other markets outside of China which further would increase the revenue of Intellegos products. Intellego will look to credit secure the minimum volumes of 360 million USD from this collaboration and Intellego has already credit secured several millions of USD in the past from Likang.
- On the disinfection front, Intellego is involved in negotiations with an American company with sales in over 100 countries where the goal is to sell Intellegos dosimeters in those markets with starting point of early 2025. Intellego has been working with this company for the last 18 months during which time the American company has performed a market analysis and received customer feedback on Intellegos UV dosimeters. The American company and Intellego estimate the annual market for Intellegos UV dosimeters in healthcare to be worth approximately 1,6 billion USD per year which is based on the number of UV disinfection runs which takes place in healthcare settings.
- Negotiations with global pharma group. Intellego is working with one of the world largest pharma groups which is using UV radiation for disinfection in e.g. clean room applications. The collaboration has been ongoing for almost a year and its approaching market launch of Intellegos dosimeters through the distribution network of the pharma group, which is expected to take place in 2025.
In addition to the project mentioned above Intellego is also involved in several additional projects which we will keep the market informed about as soon as there is concrete and relevant info to share.
Looking ahead we see that the business is moving in a positive direction where sales in the main business areas, disinfection and curing, continue to increase and are expected to continue to do so. Intellegos cashflow is now improving and the company has a solid cash balance which will enable for Intellego to finance its coming growth from its own cashflow.
Intellego's improving results comes from the continuous work to improve every aspect of its business. Furthermore, the disinfection business in particular is expected to benefit from new market standards and new regulations where UV disinfection devices are facing more stringent demands for quality control. Based on this, Intellego's long term goal is that within three to five years, the company will have a revenue of over 2 billion SEK with EBIT of over 600 million SEK.
Claes Lindahl
CEO of Intellego Technologies
Contacts
For further information, please contact:
Claes Lindahl, CEO Intellego Technologies AB
E-mail: claes.lindahl@intellego-technologies.com
Phone: +46 735 344 634
About Us
Intellego Technologies develops and manufactures color indicators that show the effect of irradiation with, among other things, invisible ultraviolet light, UV light. Color indicators are used globally in, for example, the disinfection industry, the sunscreen industry, and the manufacturing industry. Intellego's indicators have been developed from the company's patented photochromic ink, which can be adapted to different wavelengths of light and various application areas across a range of different industries. Intellego Technologies was founded in 2011, is headquartered in Stockholm, and is listed on the Nasdaq First North Growth Market.
The company's Certified Adviser on the Nasdaq First North Growth Market Stockholm is Mangold Fondkommission AB.
Intellego's website: https://intellego-technologies.com/en/
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Contact the communications team: communications@intellego-technologies.com
